Apple Q1 Market Share Falls To 2.1% Worldwide

As Apple readies to launch its reported new music service along with a new version of the iPod, the Macintosh-makers worldwide market share continues to drop well below a goal of 10% it set for itself two years ago. Data obtained exclusively by The Mac Observer showed Appleis worldwide market share had fallen 0.3% in the first-quarter of this year to 2.1% from 2.4% in the first-quarter of 2002. As for sales in the US, the news is even worse as the companyis market share has fallen below 3%.

In detail, numbers from research firm IDC showed Apple shipped 713,000 Mac units in the first quarter of this year for a ninth-place ranking among PC manufacturers worldwide at a 2.1% market share. In the same period a year earlier, Apple again placed ninth, but had 818,000 units shipped for an overall share of 2.4%. In the fourth quarter of 2002, Apple shipped 747,000 units for a tenth place position, or a 1.9% market share.

Domestically, Appleis first-quarter share came in at 2.9% on 346,000 units for a seventh place position. A year ago in the same period, Apple shipped 392,000 units for a 3.4% share, or a sixth-place ranking. In the fourth quarter of 2002, Apple shipped 386,000 units in the US for a sixth place position, or a 3.1% market share.

"Dell and Hewlett-Packard did very well in the quarter, while Apple is feeling some of the worst effects," said Roger Kay, director of client computing at IDC. "This news is not good for Apple and leaves open the question of the viability of its overall marketing and sales strategy."

Kay believes Apple is suffering from a number of issues it has yet to overcome and that could be hurting its reputation and ultimately market share. Among the issues: a lack of faster processors, products that are not as price/value competitive with its Windows competitors, and no release of Quark for OS X. "These are important issues and Apple is slowly losing the processor speed battle (to faster Intel-made processors)," he said. "Another consideration is their retail stores. They are not having a positive effect on market share and we were told early on that was a major goal of the retail strategy."

The numbers show a continuing struggle for Apple as it tries to retain some semblance of the "5 down. 95 to go." edict it set forth in May of 2001 to boost its market share from what was then 5% and add an additional 5% of Windows users. Almost two years later, the numbers show Appleis attempt at increasing market share is easier said then done.

In comparison, Dell moved back into first place in worldwide market share with 17.3%, compared to second place Hewlett-Packard with 15.8%. IBM finished third with 5.4%, laptop-savvy Fujitsu Siemens had 4.8% for fourth position and Toshiba ranked fifth with 3.7%. In the US, Dell captured a whopping 31.8% share, followed by HP at 19.5%, IBM with 4.8%, Gateway with 4.3% and Toshiba at 3.2%.

Worldwide PC shipments of 34.6 million were up 2.1% year-on-year, in line with forecast growth of 2.0%. In the US, aggressive pricing and mobile adoption helped shipments grow by 1.5% year-on-year, almost 2% ahead of forecast. Sequentially, shipments were down 9.8% worldwide and 7.0% in the United States, following a typical seasonal pattern related to the shift from consumer to commercial focus during the first quarter of the year.

Appleis first-quarter results from IDC are preliminary and final numbers will be released by IDC in June. The Q1 2003 results are being compared to final results from other periods. While it is hard to say just how much the preliminary numbers could change, IDC statistical analyst Tim OiBrien told The Mac Observer that because the unit numbers come directly from Apple, and have stayed pretty consistent over the past year from preliminary to final numbers, he doubts there will be any dramatic change. While quarterly numbers released by Apple might be different, OiBrien said Apple refines the numbers over a number of weeks. IDC also depends on its own sources to double check numbers from Apple.

The unit numbers consist of desktop, laptop and server models. The iPod portable music player is not included in the PC market share results.